Ok Guys, the $ how low can it go?

[Mega]

You are the people who claim to "Know"............so, How low can it go?
Mike

[Nicolasd]

Re: Ok Guys, the $ how low can it go?

Lower than a snake's belly ? :p

[rj1]

Re: Ok Guys, the $ how low can it go?

Not much lower, the Europeans will destroy their own currency on purpose like Sarkozy told Congress if this continues.

[Nicolasd]

Re: Ok Guys, the $ how low can it go?

Sarko is an interesting character to say the least but he is not alone in EU to make these kind of decisions.

All fiat currencies down , all hard assets up.World going back to barter trade if needed.

Incidently , one of our canadian customer (traded on NYSE) offered old SS equipment for scrap value in lieu of currency pmt for the purchase of new equipment and services for use elsewhere on their production line earlier this week.After the initial commotion and coffe machine discussions this created , we are going to kick it to see if it could be profitable !!

[c1ue]

Re: Ok Guys, the $ how low can it go?

Mauldin is saying the euro/$ has about hit its peak, and I agree with that.

Germany will exit the Union if the present trend continues; Deutschland cannot afford not to in that case.

Mauldin is also saying that the $ will continue to fall vs. the Asian currencies; I also cannot disagree with this in the long term.

China will likely continue to strengthen the yuan vs. $ up to another 30%.

I see this being a gradual process - but not for the reasons the talking heads think. I believe the gradualism is actually to allow China to diversify new currency account surpluses into other currencies/forms. Given that the US/China goods deficits are over $250B/year, and China has only roughly one trillion dollars in holdings - give or take a few hundred billion, it only takes a few years to balance out dollar losses in the existing stockpile with diversified holdings bought with current surpluses.

Japan however is in a bind; while they do trade with China to a great extent, their trade with the US both military and civilian is very great.

Ultimately the civilian side will depend on how well the other markets have grown to balance the US/CA car trade and US electronics trade - something to look at when my plate clears up a bit.

The military side is probably no longer relevant as there just ain't too many other places with the manufacturing capacity and history of cooperation Japan has.

Given this, 90yen/$ is probably going to happen sooner than the late 2009/2010 time frame I originally anticipated.

[GRG55]

Re: Ok Guys, the $ how low can it go?

Mauldin is saying the euro/$ has about hit its peak, and I agree with that.

Germany will exit the Union if the present trend continues; Deutschland cannot afford not to in that case...

Huh? The Bundesbank representatives have been the biggest hawks within the ECB, repeatedly warning it cannot lower interest rates as long as inflation is above its target band. Germany cannot (and will not) argue on one hand for a policy that results in a "strong" currency to fight inflation, and then threaten to exit the union because of a strong currency.

[Guest]

Re: Ok Guys, the $ how low can it go?

Mauldin is saying the euro/$ has about hit its peak, and I agree with that.

No great burst of insight on Mauldin's part C1ue. The USD / EUR has been plunging for a long time and is overextended. Dozens of traders have arrived at the same conclusion Mr. Mauldin has. Furthermore the insight is not even clearly actionable, in that any number of events can tip the presently oversold dollar into a further catastrophic selloff.

How much is this (glamorously roving) economist earning for these insights? Nice work if you can get it. ...

[dbarberic]

Re: Ok Guys, the $ how low can it go?

Jim Sinclair believes that it will go to at least .52 on the US$ index.

[Jim Nickerson]

Re: Ok Guys, the $ how low can it go?

No great burst of insight on Mauldin's part C1ue. The USD / EUR has been plunging for a long time and is overextended. Dozens of traders have arrived at the same conclusion Mr. Mauldin has. Furthermore the insight is not even clearly actionable, in that any number of events can tip the presently oversold dollar into a further catastrophic selloff.

How much is this (glamorously roving) economist earning for these insights? Nice work if you can get it. ...

"can tip" does mean it will or will not happen. The run up in the EURO is actionable if one has nice profits in FXE for example. You can take your profits--book them, and wait and look for something else that is trading low that may hold promise and buy it.

[Jim Nickerson]

Re: Ok Guys, the $ how low can it go?

Jim Sinclair believes that it will go to at least .52 on the US$ index.

Is there any article where one can further seek understanding of Sinclair's opinion?

[dbarberic]

Re: Ok Guys, the $ how low can it go?

Is there any article where one can further seek understanding of Sinclair's opinion?

Let me see what I can find.

His writings are sometimes cryptic.... but I do recall him writing out his whole theory (similar to a ka-poom type of hypotheisis).

[grapejelly]

Re: Ok Guys, the $ how low can it go?

I expect the dollar index to pop up about 75 and end up at 78 or even 80 in the next 6 months.

[Guest]

Re: Ok Guys, the $ how low can it go?

Grapejelly -

This chart definitely does not seem to describe a bounce back up nearly as far as 80. In fact, it shows the USD is still up near the top of it's down channel.

I saw the Aden sisters do a lot of this long term channel charting, and over several years their trend calls were very good.

Everyone (including Mauldin) thinks the USD is now heavily oversold, and they think they are being smart contrarians calling for "the crowded trade" to "take a bath" - but I think steering by contrarian instincts alone at the really large turns of the markets - i.e. the literal death of a 70 year currency standard, arguably can have a great deal of predictability about them.

The "dollar is going down" is a now distrusted truism, precisely because it's been c0mpletely true. This chart does not show that the dollar has much leeway on the upside, without busting it's major channel. I don't know about you, but I see no reason why it should bust it's major down channel any time this year.

I should pay skads of money to buy Mauldin's "insider" advice on this - hear him advise me sagely that the "smart money" says the dollar is now a buy? I think rather not. I'm not gonna be the one to underwrite his next pricey linen shirt and absurd silk ascot, or his next expensive junket to Johannesburg.

alert_2008-02-29c.gif

[grapejelly]

Re: Ok Guys, the $ how low can it go?

Grapejelly -

This chart definitely does not seem to describe a bounce back up nearly as far as 80. In fact, it shows the USD is still up near the top of it's down channel.

I saw the Aden sisters do a lot of this long term channel charting, and over several years their trend calls were very good.

Everyone (including Mauldin) thinks the USD is now heavily oversold, and they think they are being smart contrarians calling for "the crowded trade" to "take a bath" - but I think steering by contrarian instincts alone at the really large turns of the markets - i.e. the literal death of a 70 year currency standard, arguably can have a great deal of predictability about them.

The "dollar is going down" is a now distrusted truism, precisely because it's been c0mpletely true. This chart does not show that the dollar has much leeway on the upside, without busting it's major channel. I don't know about you, but I see no reason why it should bust it's major down channel any time this year.

I should pay skads of money to buy Mauldin's "insider" advice on this - hear him advise me sagely that the "smart money" says the dollar is now a buy? I think rather not. I'm not gonna be the one to underwrite his next pricey linen shirt and absurd silk ascot, or his next expensive junket to Johannesburg.

[ATTACH]284[/ATTACH]

LOL!

Well, Lukester, there is nothing to keep the US$ from rallying to around 80. I expect the Yen and Swissie to keep gaining ground and the Euro to lose ground v. the US$.

I think we are at a bottoming right now in the US$. The next shoe to drop will be awful Euro sentiment that will send the Euro down.

[c1ue]

Re: Ok Guys, the $ how low can it go?

Huh? The Bundesbank representatives have been the biggest hawks within the ECB, repeatedly warning it cannot lower interest rates as long as inflation is above its target band. Germany cannot (and will not) argue on one hand for a policy that results in a "strong" currency to fight inflation, and then threaten to exit the union because of a strong currency.

GRG,

I don't look at what the Bundesbank says, I look at what the high Euro is doing to the German economy.

As Germany is the largest export economy in the world, the high euro is heavily impacting the entire economy.

The Bundesbank is merely afraid that the resulting negative wage impact won't arrive fast enough to offset rising prices.

Ultimately, though, the German companies and the workers manning them are not going to continue to subsidize their EU Mediterranean counterparts.